10 Money Moves Experts Say You Should Make Before the End of the Year

It’s a busy time of year for most of us. Between completing our holiday shopping a traveling to see friends and familya lot can slip through the cracks: getting your year-end finances in order, for example. From maximize your savings to use tax credits while you still can, do these 10 things before the end of the year to make the most of your money, now and in the new year.

Read more: Money advice shouldn’t stress you out. Make it easy with these 6 tips

You have to earn 10 money by the end of the year

Start 2025 on a solid financial footing by doing these things now.

1. Use your remaining FSA funds

Flexible spending accountsor FSAs, are usually use-it or lose-it accounts. This means that you usually cannot carry over funds from one year to the next. If you still have money in your FSA, be sure to spend it by December 31st. You can use FSA funds for many items, including contact lenses, prescription drugs, and bandages.

2. Max out of your pension contributions

“The more money you can put into a retirement account, the better,” he said Chris Berkelinvestment advisor and president at AXIS Financial. There are limits to how much you can put into a 401(k) or IRA per year and contributing as much as you’re allowed can help you reach your savings goals faster. “If you plan to contribute to a retirement account in the near future, use current limits to max out where possible,” Berkel said.

3. Consider donating to charity

Giving to charity can be very rewarding. And your donations don’t just lead to warm feelings and a good night’s sleep. They can also help you when tax season starts. You can deduct charitable cash contributions from your taxes up to the amount 50% of your adjusted gross income. This can reduce your taxable income and potentially hit you with a lower tax bracketthereby reducing the tax you owe.

4. Check your insurance policies

Insurance is an essential part of a well-balanced financial strategy. However, your insurance coverage may no longer match your personal or financial situation. For example, major life events such as a wedding or the birth of a child can greatly affect how much cover you need. Review your auto insurance, homeowner’s or renter’s insurance, health insurance, and other policies and consider how your needs may have changed over the past year. Then compare other providers to make sure you’re still getting the best possible deal.

5. Check and balance your investment portfolio

You should rebalance your investment portfolio at least once a year. This ensures that your investments stay on track and help you achieve your goals. A Emily LukCFA, CPA, CEO and co-founder of Plenty, says rebalancing shouldn’t be cumbersome. “You shouldn’t make major changes to what you invest in unless you’re approaching big milestones like buying a home or retiring,” Luk said.

What should you do? “The No. 1 investment mistake adults make today is holding too much cash,” Luk said. “So before you start rebalancing your investment portfolio, you should reassess your money.” This means making sure you have three to six months of expenses emergency fund and on the goals you want to achieve in the next year.

Once you have cash holdings to spare, think about what your asset allocation should look like. One way experts recommend this is based on your age. For example, if you’re 25, consider holding 25% of your investments in lower-risk assets like bonds and 75% in higher-risk assets like stocks. As you age, your appetite for risk probably decreases, so you would move more money into lower-risk assets.

From there, consider diversifying across asset classes. For example, if you want to diversify your stocks, you can invest in low-cost index funds. These funds use investments from large groups of investors to create diverse portfolios that track indexes such as the S&P 500 and the Dow Jones Industrial Average. You can diversify your bonds with exchange-traded funds (ETFs) that track Treasury bills and other Treasury-backed securities, as well as bonds from issuers like Vanguard.

Talk to a financial professional to determine the best investment strategy for you.

6. Update your recipients

There are several reasons why you may want to change the beneficiaries of your insurance policies and estate. Maybe your kids are grown and don’t rely on you like they used to, or maybe you have a new spouse to support. It’s important to regularly review your recipients and ask yourself if your current list is as accurate as you want it to be. If it isn’t, now is the time to update.

7. Check your interest rates

The interest rate environment is changing rapidly. The Federal Reserve has cut the benchmark federal funds rate twice in the past few months, and more rate cuts are expected in the coming months. This can affect your money in many ways.

Here are some things to consider to make current interest rates work in your favor.

• Savings accounts: High yield savings accounts can pay annual percentage returns, or APY, up to 10 times the national average rate (or more). If your money is languishing in an account with a crappy APY, switching it to HYSA can help you grow faster. And with rates on the way down, the sooner you open one, the more interest you’ll earn.

• CD: A deposit slip is a great way to lock in today’s APY before the next rate cut. Unlike savings accounts, which have variable rates, your CD rate is fixed when you open the account, so your returns will stay the same even if the Fed cuts rates again. Also, if you have a CD matures soonbe sure to check competitors’ prices before you pass it up.

• Mortgages: Interest rates on mortgages are falling. Market rates are currently around 7% and are expected to drop to around 6% by the end of the year. If you bought your home when prices were at their peak, you may want to consider refinancing. As a general rule of thumb, it might be worth it if you can lower your rate by at least 1%. That means rates could move into the mid to high 5% range over the next year, so keep that in mind when making your decision.

• debts: If you have high-interest debt, such as credit cards and personal loans, you may be able to take advantage of recent rate cuts on consolidate your debt and pay off your balances faster.

8. Consider a Roth conversion

With traditional retirement accounts like 401(k)s and IRAs, you contribute pre-tax: Taxes are deferred until you start withdrawing funds from your retirement account. You may be able to maximize your tax benefits by converting your traditional retirement account to a Roth IRA.

With a Roth IRA, you contribute after-tax money. Then, when you draw from the account in retirement, you’ll do so tax-free. This means you won’t pay any income taxes on the growth your Roth IRA produces, which could offer meaningful savings compared to traditional retirement alternatives. Consider these things when deciding if this is the right path for you.

9. Take all required minimum distributions

If you are 73 or older, it is important that you take minimum required distributions from your retirement accounts before the end of the year. If you do not do so, the remaining amount you should have withdrawn will be subject to a 25% consumption tax. You can use this calculator to determine your required minimum distribution if you are not sure what yours is.

10. Set financial goals for the new year

Keep the positive momentum going by creating money goals to carry into the new year. Examples may include:

• Debt repayment: If you have high interest on your credit card, getting rid of it should be your top financial priority. Create a plan pay off your debt for good.

• Manage your budget: Creating a budget is relatively easy, but it can be difficult to stick to it. Set a goal not only create your budget, but manage it in the new year.

• Fully fund your emergency savings: Most experts agree that you should at least three months of expenses always in your savings account. If not right now, aim to fully fund your emergency account by the end of 2025.

• Finding the sweet spot for savings: Do you know how much money you can comfortably save every month? Here’s how to do it.

More ways to maximize your money